Finance Minister presents 2007 budget to Parliament


The 2007 budget aims to achieve balance as well as support reforms and developments, Finance Minister János Veres told Parliament on Thursday before submitting the government's draft 2007 budget for debate.

Reforms are necessary to help a sustainable reduction of deficit, and developments can help Hungary reach the level of other EU countries, Veres said. He stressed that developments must be made quickly, adding that Hungary would remain a net receiver of EU funds during the new 2007-2013 EU budgetary period.
Veres said the draft budget targets are the same as those in the convergence program, showing the general government deficit falling from an expected 10.1% in 2006 to 6.8% in 2007. Although taxes have been raised to narrow the deficit, reducing expenditures plays a bigger role in the fiscal adjustment in 2007, he said. Reducing spending requires not only government reforms but discipline, he said, noting that ministries will be required to set aside reserves which can only be released if targets are met.
The government has approved a proposal that will entirely restructure the organization of central budget institutions. "We are trying to boost the size of those institutions which operate as independent ones, aiming at an economy of scale, and eliminate useless ones," he said. Including layoffs made so far, the number of central budget employees will fall more than 7% in the coming years, he added. The cost of the layoffs has been included in budget reserves, he noted.
Resources available to local councils will increase 8% including EU funding, or 3.5% excluding funding for the Budapest public transport company BKV Zrt and the construction of the capital's planned fourth metro line. Development funding available, however, will increase by as much as 30%. At the same time, local councils must become more frugal, raising the number of hours teachers work and reducing remuneration for local council members.
In line with the convergence program, the budget bill targets balance in the state pension fund in 2007. Still, about 20% of the fund's revenue will come from the state, with the rest coming from employers and employees, he said. Austerity measures should affect pensioners the least, Veres said. He added that pensions would retain their real value in 2007, including the effects of a 4% nominal rise and an annual bonus.

HBLF Recognizes Diverse and Fair Workplaces Analysis

HBLF Recognizes Diverse and Fair Workplaces

Improving Competitiveness 'Top Priority' of EU Presidency - ... EU

Improving Competitiveness 'Top Priority' of EU Presidency - ...

Uni of Miskolc, CATL Debrecen Sign Cooperation Agreement Deals

Uni of Miskolc, CATL Debrecen Sign Cooperation Agreement

Int'l Travelers to Europe Prioritize Safety, Quality This Su... Tourism

Int'l Travelers to Europe Prioritize Safety, Quality This Su...


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.